CABINET HAS approved the reduction of the cess on imported goods from four per cent to two per cent.
This came largely as result of a meeting held last Friday at Jamaica House between private sector leaders and Government officials to address the freefall in the value of the Jamaican dollar in foreign exchange trading and other problems in the economy.
Since the cess was announced by Dr. Omar Davies while opening the budget debate on April 17, private sector bodies have lobbied the Government to roll back the cess. The Minister of Finance said that he was prepared to listen to alternatives provided they netted the equivalent in revenue. The cess was designed to bring in $3.75 billion.
On May 1, the Jamaica Chamber of Commerce (JCC) issued a statement declaring that as a result of the Government's decision to keep the cess, price increases of between six and eight per cent were likely. "It is manifestly immoral for Government to make the assumption that any individual business will be profitable in a given year," it said.
A senior member of the Private Sector Organisation of Jamaica (PSOJ), speaking on condition of anonymity yesterday, said: "We had some very positive dialogue with the Government and put forward a suggestion which will see the cess at two per cent.
This will in effect be a Customs processing fee. What has yet to be determined is how we navigate around WTO regulations but nevertheless Dr. Davies has said that the matter will be presented before Cabinet for approval. I think it is a fair compromise which ensures that the Government gets its much needed revenue. We feel that merchants will be somewhat happy with this decision."
Dr. Davies is expected to announce the re-evaluation of the cess in Parliament today.
